Is America Losing the Semiconductor War?

Is America Losing the Semiconductor War?

China is poised to take the lead in this strategic market.

Some of the most important conflicts fought today are not waged with weapons of war. They are fought in labs and factories, by scientists, researchers and technology executives. There is a real struggle for supremacy in technology. Whoever can gain an edge in tech can also gain an edge militarily, economically and financially. As the Diplomat noted, one country might be close to a breakthrough.

One of the most strategic technology is semiconductor technology. A semiconductor “is typically a solid chemical element or compound that conducts electricity under certain conditions but not others,” according to TechTarget. This makes it a foundational element for constructing electronic devices. Semiconductors are used to make diodes, integrated circuits and transistors.

The size of the semiconductor also matters. The smaller the semiconductor material, the faster the electrons can travel, draw less power, conserve space to fit more processing power and transistors in the device, and produce less heat. All of these factors generally mean faster and more efficient electronic devices. The current standard is a 10-nanometer semiconductor, although Taiwan is able to produce 7-nanometer semiconductors. For perspective, a nanometer is 1 billionth of a meter.

Taiwan, allied with the United States, has enjoyed this advantage for decades. Most electronic manufacturing takes place in Southeast Asia. But the main competition is between nations allied with America and China. Whoever holds the advantage can provide manufacturers with materials and better national capabilities.

The largest chipmaker in China, Semiconductor Manufacturing International Corp. (smic), made breakthroughs in producing 7-nanometer semiconductors. “TechInsight, a Canadian tech media outlet, revealed that smic had advanced its technology to a quasi-7 nanometer (nm) process, which might be a stepping-stone for a true 7 nm process,” reported the Diplomat. “According to TechInsight, smic products made from the quasi-7 nm process had been shipped for a year.”

The U.S. has been actively trying to block China from making this breakthrough. The Diplomat continued, “However, due to smic’s inclusion on the Entity List by the U.S. Bureau of Industry and Security in December 2020, which was designed to limit smic’s ability to reach advanced technology nodes of 10 nanometers or below, it has been blocked from obtaining the necessary Extreme Ultraviolet Lithography (euv) machines from asml of the Netherlands.” These euv machines are essential to creating advanced semiconductors in a cost-efficient manner.

However, there are other ways. Deep Ultraviolet Lithography (duv) machines can be used to produce 7-nanometer semiconductors, but it is a much more costly operation. “[U]sing duv machines requires more layers of masks, which means more times of exposure and more complexity,” wrote the Diplomat. “This will lead to a lower yield rate and a higher cost for each chip, making such a process commercially inviable nowadays. But the semiconductor industry is of a strategic importance for China. Having the capacity to make advanced chips is more important than the prices of these chips. It appears that smic is indeed moving ahead to use this older technology to achieve technological breakthroughs.” Due to China’s command economy, the dictatorship can afford higher costs to meet strategic objectives, even if it means a deficit. Free markets cannot compete that way.

Seven nanometer “chips not only lower the cost of ownership, but also deliver high computing performance, which makes AI, cloud computing and 5G economically viable both in business and military applications,” the Diplomat wrote. This breakthrough does not mean China will automatically dominate the market in the long term, but China does have a track record of successfully inserting its technology and companies into other nations’ industries.

“However, the advancement of the 7 nm process is expected to allow China to make breakthroughs in artificial intelligence and high-speed computing,” continued the Diplomat. “In turn, that will also increase China’s economic and military threats to not only Taiwan, but all of East Asia. … Breakthroughs in AI, quantum computing and hypersonics all require the assistance of advanced chips.” Despite all of the economic pressure and sanctions by the United States, China continues to find ways to evade barriers and grow as a threat militarily and economically.

The Trumpet has been reporting this trend for decades. Bible prophecy does show that at this moment America is waning in power and influence, while nations like China will briefly dominate world events. The Bible reveals that China, in alliance with Russia and other Asian nations, will inflict a great deal of economic and trade damage on America. Isaiah 23 explains that a “mart of nations” will besiege Britain and America economically.

Trumpet editor in chief Gerald Flurry wrote in “China Is Steering the World Toward War,” “Isaiah 23 discusses a powerful ‘mart of nations’ that includes both European and Asian nations, including Russia, China and Japan. … The United States and Britain are going to be left out in the cold as two gigantic trade blocs, Europe and Asia, mesh together and begin calling the shots in world commerce. These nations of Israel are going to be literally besiegedeconomically frozen out of world trade!” This semiconductor breakthrough could give China a distinct advantage in world electronic manufacturing, which will be deadly to America during this prophesied siege. This will translate to a more and more threatening military posture.

To learn more, please read Russia and China in Prophecy.